Foreign countries across the world have intricate tax treaties with the United States, which include topics such as exchanging tax information with tax authorities. In order for these tax treaties to come to fruition, they must first pass through the Executive and Legislative Branches of the U.S. Government for approval.
The Secretary of the Treasury, part of the Executive Branch and appointed by the President, has the responsibility for negotiating federal income tax treaties with foreign countries. When negotiations are completed with a foreign country, the Treasury Secretary submits the negotiated treaty to the Senate Foreign Relations Committee for the advice and consent of the Senate.
The Senate Foreign Relations Committee holds public hearings on the proposed treaty, conducts mark-up sessions to possibly revise or amend the treaty, prepares a detailed Committee Report on any action the Committee may have taken for changes to the treaty, and finally schedules Senate floor debate on the Committee-reported bill. Under our constitution, the Senate has the power, by a two-thirds vote of the Senate to approve the treaty. The Senate-passed bill is then returned to the Secretary of the Treasury for final review, and then submitted to the President for approval and signature.
When publicly available, virtually all documents related to the treaties are posted on the web, including recently signed tax treaties, TIEAs (Technical Information Exchange Agreements), including the U.S. Model Income Tax Convention, and letters to Congress and testimony.
There has not been an approval to a tax treaty by the full Senate since 2010. Some of the reasons for this include objections to FATCA and the automatic exchanging of tax information between the U.S. and foreign tax authorities.
Below is the list of the tax treaties that the U.S. has with other countries (listed in alphabetical order).
Czech Republic – 1993
Netherlands – 1992
Trinidad – 1970
Turkey – 1996